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Financials Make Some Funds Look Tempting

Updated March 30, 2008 12:01 a.m. ET

The financial sector's woes may be creating some buying opportunities for investors in exchange-traded funds.

The subprime-mortgage meltdown and the credit crunch have wreaked havoc on banks and other financial firms. Financial-stock mutual funds are down an average 21% in the 12 months through Thursday, making that the worst-performing fund category over that period, according to investment research firm Morningstar.